homebuilding.co.uk 14910 financialstepstotakebefore starting your build
1.Workouthowmuchmoneyyou have
2.Checkyourplansaresensible
3.Checktheproject’sprofitable
4.Adjustyourplansif necessary
5. Completethedesignandspecification- Choose a preferred build route
- Tie down the build cost
- Identify risks and opportunities
- Make a contingency allowance
- Put the financial controls in place
theBuild Before you start on site...
once you’ve
started the
build, options
to control
costs will be
much more
limitedunique to your project) to make sure you
don’t have a shortfall. Doing this early
provides lots of choices to close the financial
gap. Remember, once you’ve started the
build, options to control costs will be much
more limited.
Before committing to starting the build,
it’s worthwhile comparing the total cost of
developing (professional fees + land value
+ build costs) against the predicted end
value of the completed home. Hopefully,
your project will generate equity or profit,
making the efforts of self-building even
more worthwhile. If the returns aren’t what
you’d expect and there’s no obvious answer
to improve the numbers, now’s the time to
return to the drawing board and come up
with a scheme that will work.
If you need to close the financial gap,
consider some or all of these approaches:- Reduce the building footprint and limit the
scale of the build. - Review the specification and work out how
to compromise on the not so essential ‘big
ticket’ items. - Eliminate cost uncertainties by
undertaking site surveys and investigations. - Choose a more affordable route to build
— remember convenience costs more. - Never assume you will claw back money
along the way by buying better to land a
budget — you won’t, and not having a ‘slush
fund’ could prove painful.
l Tie down the build cost
It seems obvious to suggest that costs
should be known before you start to build.
For some reason, lots of people, especially
those who suffer cost overruns, don’t tie
this down and therefore the inevitable
financial pressure builds. To figure out thebuild cost, you first need to know what
you want to build. Having the approved
planning drawings is a great start but in
order to form a fuller picture you’ll also
need a detailed scope of work, a project
specification, a chosen build route and a
list of those personal must-haves and ‘nice-
to-haves’.
There’s lots of empirical evidence
available that helps to form a fairly reliable
picture of what construction costs should
be. Have a look at what others have
achieved by reading the case studies in
Homebuilding & Renovating, take a look at
the build cost calculator (page 200), and
get hold of price guides from self-build
package companies. These are all good
tools that will help you put together a basic
guide price.
But, as every self-build project is unique,
while such information is useful, more
information will be needed to work out an
accurate and reliable build figure to reflect
the individuality of your project.
Often, self-builders who aren’t
experienced or confident enough to put
together a build budget turn to the services
of professionals to do it for them. This is
fine and certainly helpful but remember, it’s
your money and you will be spending it, so
read and understand what they’ve done to
make sure it’s what you want and offers a
budget that’s affordable for you.
Finally, don’t be afraid of putting
together a budget yourself — it’s not
as complicated as you’d think and by
sending out enquiries to builders or key
subcontractors and suppliers, you’ll quickly
establish the lion’s share of the cost which
will offer some reassurance as to whether
your budget will or won’t work.use our free online build
cost calculator:
http://www.homebuilding.co.uk/
calculator